EU economic growth at ten-year high

The economies of the European Union grew at their fastest pace for a decade last year, according to revised figures from Eurostat.

Data from the EU statistics office shows the EU economy expanded by 2.5% in 2017, its strongest performance since 2007 and the start of the financial crisis.

The 19-nation strong Eurozone grew by 0.6% in the final quarter, mirroring growth in the bloc’s biggest economy, Germany.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

The numbers offer a “sharp contrast” to the situation in the UK, says The Independent, where the economy grew by 1.8% last year and has been slowing over the past 12 months as inflation stemming from the fall in the value of sterling after the Brexit vote eroded household income.

A stronger global economy has helped the Eurozone to an impressive performance during 2017, but “economists have been particularly cheered by the broad-based nature of growth, which has seen expansions in peripheral countries as well as the core large economies”, reports City AM.

Speaking to the BBC, Investec economist Ryan Djajasaputra attributed the strength of the Eurozone to the European Central Bank's stimulus policies, which have brought down the cost of borrowing in recent years. Rising wages, low inflation and record-level employment have also boosted consumer spending, which has in turn boosted investor confidence, he said.

“After many false dawns, at last some sunlight has fallen on Europe's strongest economies,” said the BBC’s economics editor Kamal Ahmed.

However, Sarah Hewin, chief economist Europe at Standard Chartered, warned that “higher energy prices and a stronger euro may be headwinds to growth this year”.

With uncertainty building around next month's Italian election, Germany struggling to agree a coalition government and the impact of Brexit still to play out, there are fears the recent resurgence could mirror the mini-revival of 2010, which was “followed by years of economic calamity as the financial crisis morphed into a currency crisis and the economic collapse of Europe's smaller, indebted economies”, says Ahmed.